Talos Energy Inc. press release

Talos Energy Announces Third Quarter 2026 Operational and Financial Results

2026-11-03

NYSE - New York Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · United States · Corporate Finance

PR Newswire

HOUSTON, Nov. 3, 2026/PRNewswire/ -- Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced its operational and financial results for the three months ended September 30, 2026. Talos also provided revised full-year 2026 guidance.

Third Quarter Operational and Financial Highlights

Production of 68.5 thousand barrels of oil per day ("MBo/d") and 91.5 thousand barrels of oil equivalent per day ("MBoe/d") exceeded guidance, driven by strong base business performance, no storm downtime and contributions from the completed acquisition. Reported net cash provided by operating activities of $325.8 million. Generated Adjusted Free Cash Flow(1)(2) of $186.3 million. Premium oil realizations of ~$1.60 above WTI supported peer-leading Adjusted EBITDA margins of ~$52/BOE. Repurchased 1.4 million shares for $23.6 million; returned $61.8 million to shareholders through the first three quarters of 2026. Recorded Net Loss(2)of $81.2 million or $0.49 Net Loss(2) per diluted share; Adjusted Net Income(1)(2) of $99.3 million or $0.58 Adjusted Net Income per diluted share(1)(2). Generated Adjusted EBITDA(1)(2) of $406.1 million. Invested $127.9 million of capital expenditures, excluding plugging and abandonment and settled decommissioning obligations. Maintained a strong balance sheet with $410.2 million of cash, an undrawn credit facility and Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA(1)(2)of 0.6x as of September 30, 2026. Achieved first oil at CPN late in the third quarter, with the well performing in line with expectations. Commenced drilling operations at Monument #4 in early September. Drilled the Daenerys appraisal well to target depth, meeting appraisal objectives.

Key Strategic Highlights

Completed the acquisition of deepwater assets from Shell on September 22, 2026; final net cash purchase price of $420 million. Increased midpoint of full-year 2026 production guidance to 69 MBo/d and 93.5 MBoe/d, inclusive of the completed Gulf of America acquisition, non-core shelf divestment and impact from Hurricane Isaias in early October. Delivered greater than 100% of the $100 million Optimal Performance Plan 2026 target ahead of schedule. Commenced a deepwater 3D seismic campaign in Honduras in October, less than three months after signing the agreements. Awarded both leases bid on at the August 2026 BBG3 Lease Sale.

"The third quarter demonstrated the strength of the business we are building," said Paul Goodfellow, President and Chief Executive Officer of Talos. "With the completion of our Gulf of America bolt-on acquisition, we have added high-quality, oil-weighted assets that increase free cash flow, improve margins and create additional infrastructure-led growth opportunities. Combined with strong performance from our base business, we are executing our strategy with greater scale, financial flexibility and a deeper portfolio of development and exploration opportunities to drive long-term value creation.

Our teams delivered another quarter of consistent operational execution, disciplined cost management and strong financial outcomes. Looking ahead, we are focused on fully integrating the new deepwater assets, advancing development and exploration opportunities across the portfolio, and continuing to build the scale and portfolio depth to position Talos as the leading pure-play offshore E&P."

| Footnotes: | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. | | (2) | Attributable to Talos Energy Inc. exclusive of non-controlling interest. |

RECENT DEVELOPMENTS AND OPERATIONS UPDATE

Operations Update:

_Production Update: _During the third quarter, oil and total equivalent production exceeded guidance, driven by continued strong base business performance, the absence of storm-related downtime and contributions from acquired assets following the September 22, 2026 closing.

_CPN:_The Company achieved first oil in September 2026, with the well performing in line with expectations. Talos, as operator, holds a 65% W.I., Walter Oil & Gas Corp. holds a 25% W.I., and Houston Energy holds a 10% W.I.

Exploration, Development and Appraisal Update:

Monument: The first Monument development well reached target depth in June, after which the operator redeployed the rig to another asset in which Talos does not hold a working interest before returning to Monument to spud the second development well in early September. Completion operations on both Monument wells are expected to commence after the second well reaches target depth. First oil is now expected in the first quarter of 2027, with gross production expected to reach 20–30 MBoe/d. Monument is a large Wilcox oil discovery in Walker Ridge blocks 271, 272, 315, and 316 and is being developed as a subsea tie-back to the Shenandoah production facility, with committed firm gross capacity of 20 MBbl/d. There is a prospective drilling location that could extend the resource beyond the base development case. Beacon Offshore Energy LLC, as operator, holds a 41.7% W.I., Talos holds a 29.7% W.I., and Navitas Petroleum LP holds a 28.6% W.I.

_Brutus Program:_The Brutus development program commenced during the third quarter with operations from the platform-based rig. The development plan has been optimized to incorporate batch drilling and completions, improving execution efficiency and project returns, with first oil expected to be phased from the second quarter through the fourth quarter of 2027. The program has also expanded from four to five wells to include an additional sidetrack opportunity.

_Daenerys: _The Daenerys appraisal well was spud in early July and drilled to target depth in late August, meeting the Company's appraisal objectives and further informing its understanding of reservoir and fluid properties. The results support continued appraisal activity while advancing the evaluation of development concepts ranging from a tie-back to a standalone host. The Company expects additional appraisal activity at Daenerys in 2027, including a sidetrack designed to further evaluate the discovery. The Company also expects to drill an exploration well in late 2027 or early 2028 targeting a nearby prospect acquired in the December 2025 BBG1 lease sale.

_Offshore Mexico:_During the third quarter, Talos announced a farm-in transaction into Block 29, a Repsol-operated pre-FID development located in the Salinas-Sureste Basin in the southern Gulf of Mexico. Upon closing, Talos will hold a 50% working interest alongside Repsol. Block 29 contains the Polok and Chinwol oil discoveries, which together are estimated to contain more than 200 MMBoe of gross recoverable resource, with a further 200 MMBoe of estimated gross resource potential across multiple on-block exploration prospects. The partners expect to progress the project toward FID in 2027.

_Offshore Honduras:_During the third quarter, Talos executed definitive agreements to acquire an 80% operated working interest in an offshore Honduras block spanning more than 4 million gross acres. The Company closed on a 45% working interest and assumed operatorship, with the acquisition of the remaining 35% working interest subject to approval by Honduras's Secretaría de Energía (SEN). Talos commenced a 3D seismic campaign in October, initially targeting a portion of the deepwater acreage.

Share Repurchase Program:

During the third quarter of 2026, Talos repurchased 1.4 million shares for $23.6 million. Since announcing its current return of capital framework in the second quarter of 2025, Talos has returned approximately $160 million to shareholders through share repurchases, reducing shares outstanding by approximately 8%.

The remaining share repurchase authorization as of September 30, 2026, was approximately $176 million. Under Talos's capital allocation framework, management expects to allocate up to 50% of annual free cash flow to share repurchases. The timing and amount of any repurchases under the Company's share repurchase program will depend on market conditions, share price, legal requirements, and other factors, and may be made from time to time in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended.

Credit Facility Update:

In conjunction with the completed Gulf of America bolt-on acquisition, the Company's borrowing base increased to $850 million, with the credit facility remaining undrawn as of September 30, 2026.

| THIRD QUARTER 2026 RESULTS | | | | Key Financial Highlights: | | | | | | | | ($ thousands, except per share and per Boe amounts) | Three Months Ended September30, 2026 | | | Total revenues | $ | 595,991 | | Net Income (Loss) attributable to Talos Energy Inc. | $ | (81,244) | | Net Income (Loss) attributable to Talos Energy Inc. per diluted share | $ | (0.49) | | Adjusted Net Income (Loss)(1)attributable to Talos Energy Inc. | $ | 99,319 | | Adjusted Net Income (Loss) attributable to Talos Energy Inc. per diluted share(1) | $ | 0.58 | | Adjusted EBITDA attributable to Talos Energy Inc.(1) | $ | 406,067 | | Adjusted EBITDA attributable to Talos Energy Inc. excluding hedges(1) | $ | 435,906 | | Capital Expenditures | $ | 127,883 |

| _ | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. |

Production

Production for the third quarter 2026 was 91.5 MBoe/d (75% oil, 83% liquids).

| | Three Months Ended September30, 2026 | | | Oil (MBbl/d) | | 68.5 | | Natural Gas (MMcf/d) | | 93.8 | | NGL (MBbl/d) | | 7.3 | | Total average net daily (MBoe/d) | | 91.5 |

| | Three Months Ended September30, 2026 | | | | | | | | | | | | | | Production | | %Oil | | %Liquids | | %Operated | | | | | | | Deepwater | | 86.9 | | | 75 | % | | 83 | % | | 83 | % | | Shelf and Gulf Coast | | 4.6 | | | 74 | % | | 77 | % | | 92 | % | | Total average net daily (MBoe/d) | | 91.5 | | | 75 | % | | 83 | % | | 83 | % |

| | Three Months Ended September30, 2026 | | | Average realized prices (excluding hedges): | | | | Oil ($/Bbl) | $ | 87.19 | | Natural Gas ($/Mcf) | $ | 3.73 | | NGL ($/Bbl) | $ | 20.94 | | Average realized price ($/Boe) | $ | 70.82 | | | | | | Average NYMEX prices: | | | | WTI ($/Bbl) | $ | 85.57 | | Henry Hub ($/MMBtu) | $ | 2.98 |

Lease Operating & General and Administrative Expenses

Total lease operating expenses for the third quarter 2026, including workover, maintenance and insurance costs, were $140.9 million, or $16.74 per Boe.

Adjusted General and Administrative expenses for the third quarter 2026, adjusted to exclude one-time transaction-related costs, and non-cash equity-based compensation, were $37.8 million, or $4.50 per Boe.

| ($ thousands, except per Boe amounts) | Three Months Ended September30, 2026 | | | Lease Operating Expenses | $ | 140,856 | | Lease Operating Expenses per Boe | $ | 16.74 | | Adjusted General & Administrative Expenses(1) | $ | 37,824 | | Adjusted General & Administrative Expenses per Boe(1) | $ | 4.50 |

| _ | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. |

Capital Expenditures

Capital expenditures for the third quarter 2026, excluding plugging and abandonment and settled decommissioning obligations, totaled $127.9 million.

| ($ thousands) | Three Months Ended September30, 2026 | | | U.S. drilling & completions | $ | 96,623 | | Asset management(1) | | 9,094 | | Seismic and G&G, land, capitalized G&A and other | | 22,166 | | Total Capital Expenditures | $ | 127,883 |

| _ | | | (1) | Asset management consists of capital expenditures for development-related activities primarily associated with recompletions and improvements to our facilities and infrastructure. |

Plugging & Abandonment Expenditures

Capital expenditures for plugging and abandonment and settled decommissioning obligations for the third quarter 2026 totaled $49.9 million.

| | Three Months Ended September30, 2026 | | | Plugging & Abandonment and Decommissioning Obligations Settled(1) | $ | 49,948 |

| _ | | | (1) | Settlement of decommissioning obligations as a result of working interest partners or counterparties of divestiture transactions that were unable to perform the required abandonment obligations due to bankruptcy or insolvency. |

Liquidity and Leverage

At September 30, 2026, Talos had a borrowing base of $850.0 million under its Bank Credit Facility with approximately $183.8 million in outstanding letters of credit. Letters of credit that are outstanding reduce the available revolving credit commitments. Cash was $410.2 million, providing Talos approximately $1,076.3 million of liquidity at quarter end. On September 30, 2026, Talos had $1,425.0 million in total debt. Net Debt(1) was $1,014.8 million, Net Debt to Last Twelve Months ("LTM") Adjusted EBITDA attributable to Talos Energy Inc.(1)was 0.6x.

| Footnotes: | | | (1) | Please see "Supplemental Non-GAAP Information" for details and reconciliations of GAAP to non-GAAP financial measures. |

OPERATIONAL & FINANCIAL GUIDANCE UPDATES

Talos has increased its full-year 2026 production guidance and now expects production to range from 68 to 70 MBo/d and 92.5 to 94.5 MBoe/d. The updated full-year 2026 guidance reflects the Gulf of America acquisition completed on September 22, 2026, the non-core shelf divestment completed on July 15, 2026 and the impact of Hurricane Isaias in early October, which is expected to reduce fourth quarter 2026 production by approximately 7 MBoe/d.

The following table summarizes Talos's revised full-year 2026 operational and production guidance.

| | | Original | | Revised | | | | | | | | | | | | FY 2026 | | FY 2026 | | | | | | | | | | ($ Millions, unless highlighted): | | Low | | High | | Low | | High | | | | | | Production | Avg Daily Production (MBoe/d) | | 85.0 | | | 90.0 | | | 92.5 | | | 94.5 | | | Avg Daily Production (MBo/d) | | 62.0 | | | 66.0 | | | 68.0 | | | 70.0 | | Capex | Capital Expenditures(1) | $ | 500 | | $ | 550 | | $ | 475 | | $ | 525 | | P&A Expenditures | P&A, Decommissioning | $ | 100 | | $ | 130 | | $ | 135 | | $ | 145 | | Cash Expenses | Cash Operating Expenses and Workovers(2)(3)(4)* | $ | 560 | | $ | 590 | | $ | 580 | | $ | 600 | | G&A(3)(5)* | $ | 130 | | $ | 140 | | $ | 135 | | $ | 145 | | | Interest Expense(6) | $ | 155 | | $ | 165 | | $ | 155 | | $ | 165 | |

| | | | (1) | Excludes acquisitions. | | (2) | Includes Lease Operating Expenses and Maintenance. | | (3) | Includes insurance costs. | | (4) | Includes reimbursements under production handling agreements. | | (5) | Excludes non-cash equity-based compensation and transaction and other expenses. | | (6) | Includes cash interest expense on debt and finance lease, surety charges and amortization of deferred financing costs and original issue discounts. | | *Due to the forward-looking nature a reconciliation of Cash Operating Expenses and Workovers and G&A to the most directly comparable GAAP measure could not be reconciled without unreasonable efforts. | |

HEDGES

The following table reflects contracted volumes and weighted average prices the Company will receive under the terms of its derivative contracts as of October 31, 2026.

| | Instrument Type | Avg. Daily Volume | | W.A. Swap | | W.A. Floor | | W.A. Ceiling | | | | | | Crude – WTI | | (Bbls) | | (Per Bbl) | | (Per Bbl) | | (Per Bbl) | | | | | | October - December 2026 | Fixed Swaps | | 4,000 | | $ | 62.50 | | --- | | --- | | | | | Collar | | 25,631 | | --- | | $ | 62.92 | | $ | 76.87 | | | January - March 2027 | Fixed Swaps | | 8,000 | | $ | 75.31 | | --- | | --- | | | | | Collar | | 27,000 | | --- | | $ | 62.32 | | $ | 77.88 | | | April - June 2027 | Fixed Swaps | | 9,000 | | $ | 73.10 | | --- | | --- | | | | | Collar | | 24,000 | | --- | | $ | 65.73 | | $ | 78.15 | | | July - September 2027 | Collar | | 15,674 | | --- | | $ | 66.97 | | $ | 84.59 | | | October - December 2027 | Collar | | 14,000 | | --- | | $ | 66.61 | | $ | 82.14 | | | Natural Gas – HH NYMEX | | (MMBtu) | | (Per MMBtu) | | (Per MMBtu) | | (Per MMBtu) | | | | | | October - December 2026 | Fixed Swaps | | 29,946 | | $ | 3.78 | | --- | | --- | | | | | Collar | | 10,000 | | --- | | $ | 2.75 | | $ | 3.71 | | | January - March 2027 | Collar | | 45,000 | | --- | | $ | 3.39 | | $ | 4.70 | | | April - June 2027 | Collar | | 36,000 | | --- | | $ | 2.64 | | $ | 3.50 | |

CONFERENCE CALL AND WEBCAST INFORMATION Talos will host a conference call, broadcast live over the internet, on Wednesday, November 4, 2026, at 10:00 AM Eastern Time (9:00 AM Central Time). Listeners can access the conference call through a webcast link on the Company's website at: Talos Third Quarter 2026 Webcast. Alternatively, the conference call can be accessed by dialing (800) 836-8184 (North American toll-free) or (646) 357-8785 (international). Please dial in approximately 15 minutes before the teleconference is scheduled to begin and ask to be joined into the Talos Energy call. A replay of the call will be available one hour after the conclusion of the conference until November 11, 2026 and can be accessed by dialing (888) 660-6345 and using access code 30408#. For more information, please refer to the Third Quarter 2026 Earnings Presentation available under Presentations and Webcasts on the Investor Relations section of Talos's website.

ABOUT TALOS ENERGY

Talos Energy (NYSE: TALO) is a technically driven, innovative, independent energy company focused on safely maximizing long-term value through its Exploration & Production business in the United States Gulf of America and offshore Mexico. We leverage decades of technical and offshore operational expertise to acquire, explore, and produce assets in key geological trends while maintaining a focus on safe and efficient operations, environmental responsibility, and community impact. For more information, visit www.talosenergy.com.

INVESTOR RELATIONS CONTACT

Kyle Sahni Kyle.Sahni@talosenergy.com

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS The information in this communication includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements, other than statements of historical fact included in this communication regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this communication, the words "will," "could," "believe," "anticipate," "intend," "estimate," "expect," "project," "forecast," "may," "objective," "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management's current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. These forward-looking statements are based on our current beliefs, based on currently available information, as to the outcome and timing of future events. Forward-looking statements may include statements about: business strategy; estimated, potential or recoverable resources, reserves and production; drilling prospects, inventories, projects and programs, including the timing, expected first oil, and anticipated operating cost efficiencies related thereto; prospects, projects and activities related to our non-operated assets over which we have less control; our ability to replace the reserves that we produce through drilling, acquisitions, recompletions or enhanced recovery; financial strategy, borrowing base under our bank credit facility, leverage ratio, availability of financing sources, including project financing options, liquidity position and capital required for our exploration and development program, acquisitions and other capital expenditures; anticipated levels of stock repurchases; realized oil and natural gas prices; changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements and the impact of such policies on us, our customers and suppliers, and the global economic environment; our ability to obtain financial assurance instruments, including surety bonds, on commercially reasonable terms; expected collateral requirements under existing or future acquisitions, surety agreements, hedging transactions, letters of credit and other secured debt; volatility in the political, legal and regulatory environments where we currently or in the future may operate; risks related to future mergers and acquisitions, including the risk we may not close when expected or at all, and may fail to realize the expected benefits of any such transaction; timing, restrictions and amount of future production of oil, natural gas and NGLs, including changes in supply caused by OPEC or the war in Iran, and any related impact on global oil prices, available resources, and domestic oil production; our hedging strategy and results; future drilling plans; availability of pipeline connections and other infrastructure on economic terms; competition, government regulations, including financial assurance requirements, and legislative and political developments; our ability to obtain permits and governmental approvals; pending legal, governmental or environmental matters; our marketing of oil, natural gas and NGLs; our integration of acquisitions, cost savings related thereto, and the anticipated post-acquisition performance of the assets and the Company; our ability to identify, acquire or develop future acquired assets, leases, reserves, exploration projects and or business acquisitions on desired terms; estimated costs of exploring, developing, acquiring or abandoning properties; operational and financial guidance; the timing of first oil; seismic results; general economic conditions, including the impact of continued inflation and associated changes in monetary policy; political and economic conditions and events in foreign oil, natural gas and NGL producing countries and acts of terrorism or sabotage; credit markets and availability of financial instruments on reasonable terms; estimates of future income taxes; our estimates and forecasts of the timing, number, profitability and other results of wells we expect to drill and other exploration activities; our strategy with respect to our minority investment in the Zama asset; uncertainty regarding our future operating results and our future revenues and expenses; anticipated capital efficiency, margin enhancement and organizational improvements and additional cash flow; impact of new accounting pronouncements on earnings in future periods; and plans, objectives, expectations and intentions contained in this communication that are not historical. Additionally, forward-looking statements may include statements regarding pending acquisitions and new leases which are based on management's current expectations and assumptions such as: future exploration and development opportunities; financing options; estimates of recoverable resources and resource potential; timing of final investment decisions; anticipated costs and expected production commencement and volumes; the timing, closing and benefits of the pending acquisitions; the anticipated impact on our financial position, growth opportunities and competitive position; and projected prospects, plans and objectives related to these assets. All of the forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control.